Friday, December 30, 2011

The 10 Most Anticipated Bitcoin Projects for 2012

I'm not so sure that Satoshi Nakamoto could have anticipated the wave of projects that have been and continue to be inspired by his creation. At this very moment, one can only imagine the development progressing in secrecy among the hundreds, if not thousands of computer programmers, investors, financial types, marketing gurus, or otherwise, that have found their second wind thanks to the possibilities of Bitcoin.

Unfortunately, I'm not privy to the closely-guarded secrets behind most of Bitcoin's projects, however many there may be. Many developers, however, are more than happy to share their ongoing work with the community, enough to definitely get us excited about Bitcoin's prospects for next year. So, without further adieu, these are The 10 Most Anticipated Bitcoin Projects for 2012:

10) BitSynCom and the MeshNet

Though somewhat mysterious about their plans, BitSynCom recently announced a massive project to assist the growing effort to launch what can only be described as "the peoples' Internet." Called MeshNet, it would be a peer-to-peer version of the Internet, dependent on its users for owning and operating the supporting infrastructure.

BitSynCom hopes to integrate Bitcoin with MeshNet to act as a payment system to reward those who maintain the infrastructure and provide bandwidth, and to charge those who use it. The development time for such an ambitious project will likely extend well past 2012, but we may see it get legs next year, especially if SOPA comes to pass in its current form. For more information, you can watch an interview with Yifu Guo of BitSynCom, here.

9) The Bitcoin Bond

"JackH" first mentioned the concept of a Bitcoin Bond back on October 25th of this year. The idea is that a publicly traded entity could be used as a vehicle through which investors could buy a piece of the Bitcoin pie while not directly purchasing any Bitcoins. The Bitcoin buying would be the responsibility of an agent associated with the "company." It's an arrangement that would sound familiar to anyone who dabbles in gold and silver ETFs.

The main driver of the project is to mitigate the fragility of the current relationship between banks and Bitcoin exchanges, as there were several instances of banks suspending their accounts with Mt.Gox, Tradehill, and Intersango over the last few months (though it's been quiet as of late).

The latest hurdle facing "JackH" is the cost of developing the legal framework for the company, which was quoted at over 200,000 British Pounds. Yikes! Apparently Mr. H. does have interested investors, though their pockets aren't quite deep enough to come up with that chunk of change. He continues to look for cheaper lawyers...

8) Bitcoin Browser Extensions

Though several attempts have been made at a browser extension, none have really proven effective nor have caught on with Bitcoin users, and most of the development in this field came to a grinding halt when the bubble burst in June. At the moment, it does not appear that anyone in the community is working on an extension, but with the pending implementation of the URI scheme and release of a thin version of the Satoshi client, a browser extension would be the next logical step and would make Bitcoin incredibly user-friendly. Hopefully we'll see one develop in 2012.

7) Bitcoin Options and Futures Trading on the Major Exchanges

2011 will no doubt be remembered as the year that Bitcoinica took Bitcoin by storm. With leveraged trading, playing the Bitcoin markets went from tee-ball to the big leagues, seemingly overnight. 2012, however, will take things to a whole new level. Mt.Gox and Tradehill have both hinted at the fact that they will be unveiling futures and options markets as part of their development plan, with Mt.Gox possibly bringing the features online as early as next month when they are set to unveil... well, something.

6) ICBIT Stock Exchange

Giving Mt.Gox, Tradehill, and Bitcoinica a run for their money will be the ICBIT Stock Exchange. Currently in alpha testing, the exchange promises options and futures trading, as well as the ability to buy traditional stocks using Bitcoins, all of the above on margin, of course.

Having access to derivatives will help to smooth out the volatility that we currently see in Bitcoin trading, and will also give merchants and miners the ability to hedge their holdings (or future holdings). These are key components to establishing a respectable currency market, and will surely generate a lot of interest outside of the Bitcoin community.

5) Electrum Overlay Network

Still looking for an official name to distinguish itself from the Electrum client (I like Overbit, myself), the Electrum Overlay Network is looking to integrate many of the services that are currently found elsewhere, as well as some that do not already exist, and bring them under the umbrella of a single platform. Features will include:

  • Client integration of BTC/fiat exchanges;
  • Wallet storage for diskless or extremely low-resource clients;
  • Server-side escrows (sending bitcoins to an email address);
  • Integration of bitcoin laundry;
  • Exchange calculators (to display the “fiat” equivalent value of BTC in clients);
  • Firstbits support;
  • Mining support for clients; and
  • Various transport protocols (especially HTTP Push, which allows PHP websites to integrate easily with Bitcoin).

This feature-rich software will be extremely popular and likely catapult Electrum to the front of the client-race, though you never know what the next guy has in his back pocket. Speaking of which:

4) Bitcoin Client Upgrades

Though not scheduled for the 0.6 version of Bitcoin, Gavin Andresen has hinted several times at his increasingly urgent desire to release a thin version of the standard client. Motivated primarily by the poor first-time user experience that comes with the full blockchain download, Gavin's dev team will likely deliver a thin version of the client in 2012. The blockchain is already topping out at 1.2 GB, and we'd hate to see what it will look like by the end of next year. In fact, most of us would rather never see it again as long as we know the friendly miner community is keeping tabs on it. Please Gavin, make the blockchain go away!

Also sorely needed is the implementation of the Bitcoin URI scheme. Currently, most Bitcoin transactions happen through the copying and pasting of ugly-looking strings of numbers and letters (i.e. public keys) that have to be manually checked and re-checked before a transaction can take place. With the URI Scheme, the click of a link in a browser will automatically launch the client and incorporate the address into a transaction. It's much needed, and we hope to see it next year.

3) New Bitcoin Transaction Types

I touched on this topic with my post about Bitcoin 0.6, but it's important enough that it needs to be repeated. The upcoming version of Bitcoin, and there will no doubt be more than one iteration in 2012, will support new transaction types. Essentially, the new version will allow for transactions with multiple signatures, thus allowing for escrow-type contracts with third-parties involved.

Having the option for multiple signatures will also add a new layer of security to Bitcoin, where you will be able to require that your transactions be signed by two different private keys, stored in physically separated devices. This added level of security will stop potential hackers and wallet thieves in their tracks, and make credit cards look downright irresponsible. It's the reason why new transactions types are number three on our list.

2) Open-Transactions (OT)

Already in private alpha-testing on a live server, OT, the brain-child of Fellow Traveler, is going to be extremely important in 2012. Really, its relationship with Bitcoin only tells part of the story, but it's an important relationship nonetheless. Bitcoin is the oil lubricating an OT machine that will enable such a vast array of financial instruments and contracts that lawyers everywhere will beg for retirement packages before they are inevitably smacked in the face with pink-slips as their jobs are made redundant.

OT will allow for truly anonymous, off-the-blockchain, instantaneous transactions, thus silencing some of Bitcoin's harshest critics. This will be a capability so powerful that integration with TOR will almost be a necessity. Multi-asset trading and smart contracts will be OT's killer apps, though the power of OT will only be limited by the imagination.

1) Max Keiser and the LoveBitcoins.org Campaign

Announced at the European Bitcoin Conference, Max Keiser is teaming up with lovebitcoins.org with the goal of bringing 1,000,000 new users to Bitcoin in 2012.

In addition to his radio and web presence, Max (I'm assuming we're on a first-name basis) has his own segment on Russia Today called the Keiser Report, with a huge audience that is sympathetic to the Bitcoin cause.

Equally important here is the structured marketing organization starting to develop within the Bitcoin community that will be extremely important to promoting the technology in 2012.

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2011 was a year of growing pains for Bitcoin. It was both loved and hated by the media and subject to a huge bubble that topped out with a market cap of over $200 million. Hackers and miscreants took shots at exchanges and Bitcoin users alike, yet the currency and the community proved their resilience.

Bitcoin is positioned better than ever to prove to the world its significance and utility. These incredible projects only hint at some of what's to come in 2012, which will no doubt be the year that Bitcoin comes of age.

9 comments:

  1. I'd be happy to answer some questions regarding the BitSyncom Initiative to provide some transparency, our PR/web guy has been away on holiday so the writing for the website is unfortunately not ready and I've just been working on hardware and software stuff lately.

    Let me know.
    yifu.guo@bitsyn.com
    skype: yifu.guo

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  2. Hi Yifu. Thanks for taking questions. Any info is appreciated - and exciting.

    Do you have a roadmap, milestones, or dates you'd like to share?

    I love the idea of funding infrastructure with bitcoin. In my mind that's a win-win-win-win.
    1) Bitcoin gains a new raison d'ĂȘtre
    2) infrastructure suffers no tragedy of the commons - quite the opposite
    3) hopefully we keep it simple enough that anyone could challenge a geographical monopoly
    4) maybe we (the Royal "we") even stun the world with what's possible without regulation and centralization - and win-over new disciples


    Tangent:
    I think I saw you at the NYC Bit Conf this summer. I think you spoke out against the alt coins - in Gavin's little meeting in the corner. Was that you?

    Anyway, since then it's clearly been shown (in my mind) that Bitcoin truly is gold, and any alt coin is worthless - maybe unless it can fill some niche or important gap in BTC (without being run by a shady dictator). IF (big IF) bitcoin is somehow not a perfect fit for funding these mesh towers, but some morphed bitcoin cousin could do better (quicker blocks? slightly inflationary?), I think you should consider it.

    If that were the case I think there could be a symbiotic relationship - just as in I see no deep competition between NMC and BTC. I think bitcoin would continue to be the gold-standard store of value, and inflationary NameCoin and MeshCoin could be currencies people purchase with their bitcoins. Bitcoin could be a gateway currency. (And I'm guessing that regulatory burdens on purely virtual exchanges might be lighter and arrive much further in the future).

    tl;dr:
    My real point is that a successful meshnet is much, much more important than finding a *direct* use for bitcoin. I'm obviously talking about complicating the project (adding more work), so I understand if anyone thinks otherwise. I'm just putting this out there.

    Thanks for listening. Thanks for your work.

    Cheers,
    bc

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  3. > I see no deep competition between NMC and BTC...

    Namecoins do not pose any threat to Bitcoins.

    They pose a big threat to centralized DNS.

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  4. @bill,

    I feel since meshnet and btc are both p2p systems they'll complement each other nicely. as for road maps and dates things are not too clear at the moment however.

    The stages go like this curently.

    1. Find Hardware - cheap ics + nfc enabled tablets
    2. Build Software - ICS rom designed with bitcoin in mind, for the purpose of PoS and a task I call get bitcoin out of the "tech ghetto"
    3. Deploy Infrastructure - build meshnet towers for nyc.

    I'm currently holding a MIPS tablet from china running the Xburst 4770 from Ingenic, I got ICS on it, and looking to doing some Ux design for the home screen, it really has to be under-three-click-to-commerce, other wise we at BitSyncom feel it'll be a great hindrance to main stream adaptation.

    with that said, this tablet will shoot for under $150 since there's no monetization aspect for this project, currently there's no NFC support yet, our major focus is to flush out the kick starter and our plans so we can get some funding to properly execute this, the presentation I did early this month caught some attention.

    in that tangent, I did not exactly speak out against alt coins, but rather merge mining, while I love the goal of merge mining which is improving network strength, by allow this, the value of both BTC and NMC will drop as a result, because you now no longer has to choose which one to mine, thus the supply has effectively increased and demand decreased.

    I also feel this meshnet is much bigger than bitcoins, everytime I look back on how I got here and how this project evolved to such stage, it's quiet interesting how the dots connected, I will share this story soon, but for now, Let's enjoy the holidays. :)

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  5. You mention browser extensions but say that none are in the works. I would like to inform you about Safebit (http://safeb.it). It is in its very early stages, but it looks extremely promising.

    Safebit will initially be released as a thin client in a Chrome app using the bitcoin-js library. Users will have access to security features such as split keys if their wallet is hosted, but can also choose to store their key on their own.

    A VERY early (pre-alpha) release is available here if you would like to try it out: https://chrome.google.com/webstore/detail/ablfbfgmgfoggdhhcnledndibdihggpb

    We were also featured on The Bitcoin Show: http://www.youtube.com/watch?v=K_wwjKJIPaE

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  6. RE: Item 4) "Also sorely needed is the implementation of the Bitcoin URI scheme."

    MultiBit has just implemented browser protocol handlers. You can click on a browser bitcoin link and it starts up MultiBit and fills out the 'Send' form.

    There are more details here:
    https://bitcointalk.org/index.php?topic=43616.msg672356#msg672356

    Jim

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  7. Just as an aside: the Bitcoin graphical symbol could be used to indicate whitelabeled affiliations as follows - start with the bitcoin graphic, enter value on the side (for Bitcoin, a value of 1.00); then, when moused over, rotate between offered "whitelabel services" such as flags or other coin graphics and change the value on the side. Ultimately, I feel, a coin engine will be necessary .. but for now the golden apples of Bitcoin can be served up in a dynamic carousel, or a pie (pie chart showing of bitcoin accepted white label ties and their slivers of the overall market which persists as long as the pie isn't clicked on, the whitelabel brands currencies, etc being icons outside the pie :) ).

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  8. Does anyone know where I can buy stock in Bitcoin? Please email me @ jed.stevens@gmail.com

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